Buffett said to have offered Uber $3B; talks failed

Warren Buffett proposed investing $3 billion in Uber Technologies earlier this year, but the talks fell apart following disagreements over the terms and size of the deal, people familiar with the matter said.

The now-dead Uber transaction is reminiscent of the winning bet Buffett’s Berkshire Hathaway made on Goldman Sachs during the financial crisis. Buffett invested $5 billion in Goldman Sachs, lending his imprimatur to the bank when it was reeling after the collapse of rival Lehman Brothers Holdings Inc. in late 2008. In exchange, Buffett’s company got preferred stock that ultimately netted Berkshire more than $1.6 billion in profit. Berkshire also got warrants to buy Goldman stock that produced an even bigger gain.

Buffett proposed similar terms to Uber in the wake of a crisis of the ride-hailing company’s own making. Buffett would have effectively lent Uber his sterling reputation, along with some capital, in exchange for cushy deal terms. A spokesman for Uber declined to comment. Buffett did not immediately respond to a request for comment left with an assistant.

Under the proposed agreement, Berkshire Hathaway would have provided a convertible loan to Uber that would have protected Buffett’s investment should Uber hit financial straits, while providing significant upside if Uber continued to grow in value, said the people, who spoke under condition of anonymity because the discussions were private. Buffett’s initial offer was well above $3 billion, one of the people said.

During negotiations Uber Chief Executive Officer Dara Khosrowshahi proposed decreasing the size of the deal to $2 billion, one person said, hoping to get Buffett’s backing while giving him a potentially smaller share of the company.